@cindeadlee = the profit is not $170k. Appears you took the $440k selling price and subtracted the mortgage to get to the profit. The mortgage balance has nothing to do with it.
The profit is
the selling price of $440k,
less any selling expenses (for example, the commission),
less any improvements you made during the time you owned it,
less how much you paid for it ($170k - despite the divorce, the cost basis remains the same).
From that result, you can exclude $250k as long as YOU lived in the home at least 2 of the past 5 year.
So $440k- $170k is $270k
As long as your selling expenses and any improvements you made to the house exceed $20k AND you lived in the home for 2 of the past 5 years, there is not going to be any capital gains tax.
